SIP Calculator – Systematic Investment Plan CalculatorSaving

SIP Calculator – Systematic Investment Plan Calculator
Saving and investing are two of the best habits that
individuals can inculcate now to benefit in the future. Wealth
creation takes a long time and therefore the ideal choice is to
begin now. A conscious effort is required in creating the financial
corpus that one may need for a financially comfortable future. One
of the investment instruments that can help to generate a suitable
financial corpus for the future is a Systematic Investment Plan or
an SIP.

Table of Contents
¿1 – What is SIP Calculator?
¿2 – How does a SIP calculator work?
¿3 – How to use a SIP calculator?
4 – What are the advantages of using a SIP
calculator
5 – Conclusion
What is SIP Calculator?

A Systematic
Investment Plan (SIP) calculator is a financial tool
that can help in calculating the returns that an investor may
earn through SIP investments. The calculator also estimates the
amount of money that an investor must invest every month to earn
a target corpus in the future. In simple terms, a SIP calculator
shows a roadmap to investors for achieving various financial
goals.

The SIP calculator is an effective tool to
automatically compute complex financial calculations, without
investors having to manually calculate. All it requires is for
investors to provide a few key inputs to arrive at the result
within a few seconds.

¿How does a SIP calculator work?
A sip calculator in india requires users to enter certain
values like the amount to be invested, frequency of investment,
investment duration, and the expected returns.

The SIP calculator is based on the compound interest
formula. Investors can better understand the SIP calculator
functionality with the help of below-mentioned formula.

FV = P [ (1+i)^n-1 ] *
(1+i)/i
FV Future value or the amount you get at maturity.
P Amount you invest through SIP
i Compounded rate of return
n Investment duration in months
r Expected rate of return
Example – Suppose an investor wants to invest Rs. 2,000 every
month. The tenure of investment is 24 months and he/she expects
an annual rate of return of 12%.

The SIP calculation using the lump sum sip calculator will be:

i = r/100/12 or 0.01
FV = 2000 * [(1+0.01) ^24 – 1] * (1+0.01)/0.01

With the above investment, an investor can generate
Rs. 54,486 at maturity.